Insights on beer marketing & PR by a beer-war vet

Instead, taking a bigger view of the beer market, I suggest that in that swan-song we can hear chords of big retail replacing big brewing in Australia.

In many respects Swan Brewery was a dinosaur. It reflects the entitled view of ‘owning’ state markets that the big capital city breweries had for decades. Indeed, almost all these big breweries – like Swan, Tooheys, CUB and Castlemaine Perkins – were constructed to produce enough beer for 100% of ‘their’ state’s market.

And why not? In the good ol’ hey days (not so long ago in the 1970/80s) Swan had over 95% of the Western Australian market and Castlemaine had almost 90 of Queensland for example.

But times changed and those breweries haven’t.

It’s been a challenge for them. On the one hand, the tradition of owning mega-brands, market dominance and the advantages of economies of scale. While on the other, pressured for flexility to create small batches of new styles and innovative beer brands.

Hard to do in one brewery where you’ve already invested heavily in the biggest brewing equipment available on the planet. Hard to have both mindsets in the one company.

I’m not saying that Swan’s closure means we’ll see more big breweries in Australia ‘rationalised’. However, no matter how you spin it – they got their marketing wrong.

In that market you can almost hear brakes screeching as big brewers rapidly seek more flexible operations.

LION has invested in smaller craft breweries, notably Little Creatures and James Squire. CUB took over Matilda Bay. Both of them are rapidly topping up their traditional big-brand portfolios with small craft and niche boutique brands from both domestic brewers and international.

This sense of urgency to ‘get niche’ is almost palpable.

Big retail: big threat
One very big reason for this urgency by LION and CUB is because of Woolies and Coles.

Big retail and the colossal impact they can have on brands has been a big threat to the big brewers for years.

Now that competitive tension is really out there for all to see.

Retailers have tried in various ways, year on year, to squeeze more and more profit from the brands of the big brewers. They’ve tried just about everything including bringing in their own imported premium beers.

Now retailers are becoming brewers. Well .. almost.

Four new Sail & Anchor craft beer brands in pride of place at Dan Murphy’s

Here’s a recent case study: Woolworth’s through its Dan Murphy’s owns the Sail & Anchor brand. They also have an interest in another WA brewer, Gage Roads. Dan Murphy’s has just released a clutch of new ‘craft’ Sail & Anchor beer styles/brands which have been brewed under contract at Gage Roads.

Own the brands: not the brewery
It’s a great position to be in: own the brands but not the brewing equipment as well as owning almost all the retail. And given that LION’s website focuses exclusively on ‘brands’ as opposed to breweries (and all the heritage that used to go with them) perhaps that’s their plan too?

So who will own the title for ‘BIG’ in future? BIG brewer or BIG retailer?

Clearly the tectonic plates of beer market ownership are shifting. Maybe that’s a good thing. One benefit is that as the big guys battle for niches, their marketing has a halo effect for small craft brewers like Cavalier or Mountain Goat.

Woolies Lager?
One outcome of bigger retail power in the beer market that I am not looking forward to is homebrand beer. The huge UK retailer Sainsbury’s provides their version of Crown Lager for example. Shudder…

Woolies Lager is here already! I consider the existing Sail & Anchor range to be the homebrand product line, as it is a Woolworths product exclusive to Woolworths owned outlets created purely for the purpose of filling the Woolies beer shelves in place of other brands.

Despite the recent launch of the new range of 4 Sail & Anchor “craft” beers that you have noted, for some time we have already had Sail & Anchor Dry Dock Premium Lager, Sail & Anchor Bolt Low Carb Lager and Sail & Anchor Clipper Light. I’ve considered these homebrand Woolies Lager for a few years now.

beerlinesblog

Thanks James for the comments on the earlier Sail & Anchor beers. I agree entirely. I have to admit that the wall of these new ‘craft’ beers at Dan’s was a bit of shock, cutting through to prompt this post. That said: I can see why I completely overlooked Dry Dock, Bolt and Clipper Light….

As I recall Woolies bought Sail & Anchor when they bought ALH from Foster’s? I wonder if Foster’s – now CUB – expected it to revive in the same market as their Matilda Bay? Thanks again. Cheers!